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If Your Car Breaks Down, Will Insurance Cover a Rental? 

Summary

A lot of people depend on their cars, but breakdowns happen. Whether or not your insurance will cover the cost of a rental while your car is being repaired depends on a few factors—like what your policy covers, what riders and options you’ve added, and the circumstances under which your vehicle is out of commission.

  •  If you’ve been in a collision, your insurance may offer rental car reimbursement if you have added this as part of your collision coverage.
  • If your vehicle broke down due to deferred maintenance, it is unlikely that insurance will cover your rental car costs.

Cars can be unpredictable machines. If your car breaks down and is in the shop, you still need to get around. The easiest fix for this is rental cars, which are widely available, but can be expensive. 

If you have a good insurance policy, you might wonder if it covers the cost of a rental car in sticky situations. This blog will break down the situations car insurance can potentially cover a rental. 

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Will Insurance Cover a Rental If My Car Breaks Down?

The short answer to this question is: sometimes. The longer answer is: yes, but only if you have rental car reimbursement as an option on your insurance policy. Even then, it really depends on the situation that caused your car to break down. 

There’s some information that is important to know here. Whether or not you can get a rental depends not only on the options you’ve added to your car insurance policy, but the type of policy as well. It also depends on whether your car broke down because of an accident or because it needed routine or nonroutine maintenance. 

This is a basic guide that looks at a few specific situations. If you need a more comprehensive primer on car insurance, check out our Car Insurance 101 Guide.

If I’m in an Accident, Can I Get a Rental Car?

An accident isn’t the same as a breakdown, even though they both might put your vehicle out of commission for a while.

We’ll start talking about insurance and rental cars by discussing what happens in case of an accident:

Liability-Only Policies 

If you have what’s called a liability-only policy, you and your car might not be covered in case of an accident (at least probably not by your insurance policy). Usually, this only includes damage that occurs to another vehicle or driver in an accident. In the case of a liability-only policy, a rental car might not be covered. 

However, if you’re in an accident that you’re not at fault for and you have a liability-only policy, it’s possible that the other driver’s insurance will cover a rental car for you. It’s worth checking into if you find yourself in this situation.

Comprehensive and or Collision Car Insurance Policies 

On the other hand, a rental car could be covered in many circumstances if you have a comprehensive and or collision car insurance policy. These car insurance policies cover many potential problems, including accidents, theft, and even hitting an animal.

Under some comprehensive collision policies, the cost of a rental car while yours is being repaired is automatically included. However, don’t take that option as a given. Sometimes you may need to add rental car reimbursement to your policy in the form of a rider. A rider is an optional type of insurance coverage you can add to your policy for a little extra cost. 

If you’re not sure which type of insurance policy you have, check with your insurance provider. If you’re looking for a car insurance policy, check Guaranteed Insurance so we can search for the best rates for you. We’ll help you compare insurance quotes from nearly 20 top-rated carriers  so that you don’t have to.

What Is Rental Car Reimbursement?

Rental car reimbursement is a coverage option you can add to your regular comprehensive collision car insurance plan. If you choose to pay for rental car reimbursement, your insurer could potentially cover your rental costs if your car breaks down or needs repairs after an accident.  

Rental car reimbursement also only covers the cost of a rental car if something happens to your personal vehicle. It almost goes without saying, but rental car reimbursement won’t cover the cost of a rental vehicle for a vacation or other purposes.

It’s important not to confuse rental car reimbursement with rental car coverage. Reimbursement provides a rental car for you while your personal car is being repaired or replaced due to a claim. Rental car coverage is insurance that protects you when you are driving a rental car that is provided by the rental car company as part of your rental car contract. You should note that most regular auto policies do not cover rental car insurance for personal rental vehicles or vehicles over a certain weight, such as moving vans, trucks, or pull-behind trailers. 

Rental Car Reimbursement and Other Forms of Transportation

Rental car reimbursement coverage could potentially also pay for public transportation if you choose to take a bus or train to work or school rather than rent a car. More extensive policies might also cover the cost of rideshare services like Uber or Lyft and sometimes taxis as well. 

Rental car reimbursement coverage doesn’t pay for a rental if your car is just at the shop getting maintenance done. You will need to cover that personally. Or, if you’re lucky, your mechanic might provide a loaner vehicle as part of their customer service. 

The Limits of Rental Car Reimbursement

One more thing to note here: rental car reimbursement coverage is often limited. That means that there are usually a few caveats on allotted time or the allowed cost of your rental car reimbursement.

Everything is different, so make sure to check your policy carefully. You can likely expect your rental car reimbursement to stop after a specific period of time or dollar amount. After this, you’ll need to pay out of pocket.

You also may have  options on where you can rent a car through your insurance policy. Many insurance providers might have a list of approved rental car providers that the policies they provide will pay for. This probably won’t cause any problems, but to make sure the rental cost is covered, check with your agent to see if you’re using an approved provider.   

How Much Does Rental Reimbursement Cost?

If you opt for rental reimbursement coverage as a part of your regular car insurance policy, it can vary a little depending on the insurance provider. 

To many, this is a low cost compared to the potential out-of-pocket cost of a rental car. For example renting a car for a weekend can cost hundreds of dollars, but a year of rental reimbursement insurance coverage only costs about 100 dollars, on average. This is just one way that the right insurance plan could potentially result in savings*. 

Will Car Insurance Cover a Sudden Breakdown?

Unfortunately, if your car suddenly breaks down, your car insurance may not cover the cost of repairs unless it was due to a claim.  Auto insurance policies cover damage and expenses incurred in case of an accident or natural disaster as long as you have the coverage. For example, if you get in a fender bender or your windshield is damaged by hail, or a rock, etc.insurance could possibly cover those costs. Each state can be different in the case of glass — some states have a deductible and some do not. This can also be affected by what coverage that falls under on the policy and if you have chosen that coverage as part of your policy.

Even then, only comprehensive and collision insurance generally covers most  repairs from accidents. A normal breakdown usually isn’t covered at all, and liability-only insurance might only cover the cost of repairing the not at fault party’s if you caused the damage to it.  

Who Pays for a Rental Car After a Breakdown or Accident?

Let’s look at a few different scenarios to clarify everything that we’ve explained so far.

What if I Have an Accident With Liability-Only Insurance?

Imagine this scenario: you’re in an auto accident, and now your vehicle needs extensive repairs. You have liability-only insurance, and you’re not at fault in the accident. Who pays for a rental car?

The answer here is to check with the other party’s insurance provider. In this situation, even though you’re not at fault, your liability-only insurance will likely not  pay for your repairs or your rental. If the party at fault (the person who hit your car) has comprehensive or liability-only insurance, their insurance could potentially be on the hook for both your rental and repair bill. 

What if I Have an Accident With Comprehensive Collision Insurance?

Now imagine another scenario: you’re in an auto accident due to poor weather conditions on the road. Your vehicle needs repairs, but it’s hard to say exactly who is at fault yet until there’s an investigation. Who pays for the rental car?

If you have a rental reimbursement rider, the answer here is your auto insurance company. Your investment in insurance will pay off by keeping you on the road even while your car is out of commission. Check on what the limits are on time and cost, and make sure to choose a preferred rental shop to make sure the process goes smoothly. 

What if I Have an Accident With No Insurance?  

This is not a desirable scenario at all, but it’s worth mentioning just to drive home how dangerous driving without insurance can be. 

Driving without insurance is illegal. The penalties and seriousness of not having insurance vary between states, but being an uninsured driver is not only irresponsible, but it’s illegal and expensive. 

If you get in an accident with no insurance, you’d be liable for all of the expenses out of pocket. This includes repair bills, rentals, and medical bills. In addition, you could be sued by the other party, even if you’re not at fault. You could potentially be fined, lose your license, have your wages garnished, or be jailed for driving without insurance. 

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The Bottom Line

If your car breaks down, whether or not you have rental coverage comes down to the type of insurance policy you have and the riders/endorsements you’ve chosen to expand your coverage with. 

If you’re shopping around for an auto insurance policy, be sure to check out the options available at Guaranteed Rate Insurance. Our searching gets you savings.* 

*Savings, if any, vary based on the consumer’s profile and other factors. Contact your insurance agent for more information. Restrictions apply.

All information provided in this publication is for informational and educational purposes only, and in no way is any of the content contained herein to be construed as financial, investment, or legal advice or instruction. Guaranteed Rate Insurance does not guarantee the quality, accuracy, completeness or timelines of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error free. Some information in the publication may have been provided by third parties and has not necessarily been verified by Guaranteed Rate Insurance. Guaranteed Rate Insurance, its affiliates and subsidiaries do not assume any liability for the information contained herein, be it direct, indirect, consequential, special, or exemplary, or other damages whatsoever and howsoever caused, arising out of or in connection with the use of this publication or in reliance on the information, including any personal or pecuniary loss, whether the action is in contract, tort (including negligence) or other tortious action.

Sources

What is covered by a basic auto insurance policy? | III

Rental Car Reimbursement vs. Rental Car Coverage | The Balance

Why You Should Never Drive Without Car Insurance | Time